Congress Passed One Major Housing Law This Year. The Clause That Reaches Your Escrow Is About the Appraisal.

Voters go to the polls tomorrow. Reporting on the housing politics behind this election notes that most federal housing action over the past two years came by executive order, with one major exception: the 21st Century ROAD to Housing Act, which Congress passed with bipartisan support (CNN, November 2, 2026).

Realonomie takes no position on any candidate or measure. But that law is on the books, and one clause in it lands directly in a California escrow: what happens when an appraisal comes in below the price your buyer agreed to pay.

What Section 704 actually requires

• ·The 21st Century ROAD to Housing Act became Public Law 119-101 on July 11, 2026, after passing the Senate 85-5 and the House 358-32 (Congressional Research Service report R49354, September 17, 2026)
• ·Section 704, the Appraisal Modernization Act, directs USDA, VA, FHA and FHFA to implement and maintain requirements that creditors on federally backed mortgages have review-and-resolution procedures for a reconsideration of value, or a subsequent appraisal, requested by the consumer (CRS R49354; House Financial Services section-by-section summary)
• ·This is a directive to four agencies, not a rule a seller can wave at the closing table today; the Bipartisan Policy Center keeps an implementation tracker of the deadlines it sets

Why Congress wrote it into statute

A reconsideration of value — an ROV — asks the lender to have the appraisal re-examined, usually with comparable sales the appraiser did not use. It has been written, withdrawn and rewritten by regulation before.

FHA added borrower-initiated ROV requirements in Mortgagee Letter 2024-07, published May 1, 2024, with mandatory implementation moved to case numbers assigned on or after October 31, 2024 by Mortgagee Letter 2024-16. FHA then rescinded that guidance — Mortgagee Letters 2021-27, 2024-07 and 2024-16 — in Mortgagee Letter 2025-08, effective March 19, 2025, as summarized by compliance firms covering the change (TENA; RMAA).

Fannie Mae’s framework stayed in place: lenders had to implement its borrower-initiated ROV framework for applications dated on or after October 31, 2024 (Fannie Mae selling notice). So the answer to “can this appraisal be challenged” has depended on which loan your buyer is using. Ask their lender which policy it operates under rather than assuming.

What a low appraisal does to a California sale

The appraisal is ordered by your buyer’s lender, which sizes the loan against the lower of the contract price or the appraised value. A shortfall becomes cash the buyer brings, a renegotiated price, a reconsideration request, or a cancellation.

The arithmetic is identical in Redding, Fresno and Riverside; only the size changes. Take the Bay Area as the concrete case. The National Association of Realtors put the third-quarter 2026 median for an existing single-family home in the San Jose–Sunnyvale–Santa Clara metro at $1,920,000 (NAR, October 29, 2026). A 5% gap on that figure is $96,000 somebody has to find. On the statewide median — C.A.R. reported $899,720 for September 2026, up 1.7% year over year — the same 5% is about $45,000. Neither is easy to cover at current borrowing costs: Freddie Mac put the 30-year fixed at 7.24% for the week ending October 29, 2026, against 6.17% a year earlier (Freddie Mac PMMS).

California already requires a notice on this subject. AB 948 added Civil Code section 1102.6g, so that contracts for the sale of residential real property entered into after July 1, 2022 carry a statement that any appraisal of the property must be unbiased and objective and not influenced by improper or illegal considerations, together with how to report a concern (first tuesday journal; AB 948 bill text). It is not advice about your transaction; it is a standing statement of what an appraisal is supposed to be.

What a seller can actually do

• ·Assemble the comparable sales and the dated permit and receipt trail before the appraisal is ordered, and give it to your broker to pass along through the proper channel
• ·Do not contact the appraiser directly to argue value. Everything routes through the lender who ordered the report
• ·Remember whose request it is: the reconsideration in Section 704 is consumer-initiated, so it runs through your buyer and their lender, not through you
• ·Read the appraisal contingency and the loan contingency as separate risks, and ask your broker which one a shortfall triggers first
• ·Decide in advance what you would do with a gap — price, credit, or neither — and read up on that second negotiation

The number on your side of the table

You do not control the appraiser, your buyer’s lender, or which agency writes its rule first. You control your list price and what the sale costs you to execute.

On a $1,000,000 California home, a traditional listing-side commission of about 3% runs roughly $30,000. Realonomie lists your home on the same MLS every agent uses, with a licensed California broker, for $999 at MLS launch — non-refundable, covering photography, signage, the dedicated property page and marketing — plus $5,000 paid from escrow only if the home actually closes. On that $1,000,000 home that is $5,999 in total against roughly $30,000: $24K+ you keep. Above the first million the closing fee adds $2,500 for each additional million, so a sale at the $1,920,000 San Jose metro median would be $999 up front plus $7,500 at close. The full fee schedule shows every tier.

A federal statute can set the procedure around your appraisal. It cannot set the comparable sales on your street. This is general information, not legal, tax or investment advice, and we do not forecast prices or rates.